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CBOT wheat closes lower on Plains rains, exports

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed lower on Thursday, hit by rainfall in the US Great Plains and by lower than expected weekly US export sales.

CBOT wheat closed 1/2 to 6 cents lower, with March down 1/2 at $2.47-1/4. May closed 1-1/2 lower at $2.58-1/4.

"It was pressured mainly by the good Plains rains and the forecasts for additional rain next week in areas that haven't seen much rain since last September and October," said Shawn McCambridge, analyst for Prudential Securities.

Weather Services Corp. early Thursday said rain of 0.3 to 1.5 inches (8-38 mm) was likely in most areas of the US Great Plains hard red winter wheat region Thursday and another period of rain or showers is expected over the weekend extending through Tuesday.

WSC meteorologist Mike Palmerino said "this is a solid rain event. Even in Lubbock (Texas), they are predicting up to 1/2 inch."

In southwest Kansas, rainfall this morning alone exceeded the normal average for the month of March, Palmerino said.

Rain fell Thursday on parched wheat fields from Texas to Kansas.

"Anything will help, this is not too late," said Jim Shroyer, extension wheat agronomist at Kansas State University, of Thursday's rain. "This is good, but we need more."

The storm's predicted rainfall of 1/2 to 1-1/2 inches will reach even the driest wheat areas of Texas, Oklahoma and Kansas, meteorologists said. Plus a second storm of similar breadth and intensity was forecast for the area next week.

"This will alleviate some of the stress," said Shroyer. "We need a good three inches over the next month or so."

Wheat futures also were hit by paltry export sales of US wheat recently.

The US Department of Agriculture, in its weekly report, said net export sales of US wheat during the week ended Feb. 24 totalled 230,400 tonnes, below trade expectations for 250,000 to 550,000 tonnes.

The tally was three-fifths below both the previous week and the four-week average, according to the USDA.

Light underpinning however was seen in news that the United States would raise its export donation to Jordan by 180,000 tonnes to 380,000 tonnes in fiscal 2000 that began Oct. 1.

Jordan's official Petra news agency said US Agriculture Undersecretary Richard Rominger announced the move after talks with Jordanian officials in Amman.

Players expecting additional export business to China following its purchase on Monday of 50,000 tonnes of wheat from the Pacific Northwest were left guessing.

China has shunned wheat purchases from the Pacific Northwest for more than two decades because of a sour-smelling grain fungus known as TCK smut.

The export picture early Thursday included news South Korea has invited tenders to buy 23,000 tonnes of US wheat and that Turkey has slated a tender in March to sell up to 250,000 tonnes of durum. US wheat exporters brushed aside talk that Ukraine will buy up to 800,000 tonnes of US wheat this year.

There have been big deliveries, as expected, against the March contract and improved crop weather in the US winter wheat belt continues to stymie attempts to rally wheat prices.

The delivery tally on the March contract Thursday was at 3,476 lots and found weak stopping amid a lack of urgency in obtaining the abundant wheat supplies.

Funds sold 1,500 lots. Prudential Securities sold 600 May, FIMAT Futures sold 500 May and Refco Inc. bought 800 May.

Refco also bought 600 July $2.80 calls.

CBOT wheat futures volume was estimated by the CBOT at 34,000 lots, above the 30,145 lots traded Wednesday.

Wheat options volume was estimated at 8,000 lots. -Reuters